Friday, 28 August 2020

Restriction on the transfer of shares under the Companies and Allied Matters Act, 2020

 By Larry Nkwor Esq.

Under the repealed Companies and Allied Matters Act (CAMA), it was mandatory for a private company to restrict the transfer of shares in its Articles of association (articles).

Section 22(2) of the repealed CAMA provides that:

"Every private company shall by its articles restrict the transfer of its shares."

The new CAMA, appears to have modified this position as it replaces the word 'shall' with 'may'. In essence, a private company may choose not to restrict the transfer of its shares. However, the new CAMA introduces restrictions which must be present, should a private company decide to restrict the transfer of its shares in its articles.  Section 22(2) of CAMA 2020, provides that:

"Subject to the provisions of the articles, a private company may restrict the transfer of its shares and also provide that-

(a) the company shall not, without the consent of all its members, sell assets having a value of more than 50% of the total value of the company’s assets;

(b) a member shall not sell that member’s shares in the company to a non-member, without first offering those shares to existing members; and

(c) a member, or a group of members acting together, shall not sell or agree to sell more than 50% of the shares in the company to a person who is not then a member, unless that non-member has offered to buy all the existing members’ interests on the same terms."

A community reading of Section 22(2) of the new CAMA would suggest that, albeit a private company has the discretion of deciding whether or not to restrict the transfer of shares in its articles, if the private company chooses to restrict transfer of its shares, then the restrictions in Section 22(2) must be present. In other words, a private company may choose not to restrict the transfer of shares. Nevertheless, if the company decides to restrict transfer of its shares, the restrictions in Section 22(2) must be encapsulated in the articles of the company.

The first restriction prohibits the company from selling assets having a value of more than fifty percent (50%) of the total value of the company’s assets, without the consent of all its members. The second restriction introduces the right of first offer, importing that a member's shares cannot be sold to a non-member, without first offering those shares to existing members. The last restriction bars members of the company from selling more than fifty percent (50%) of the shares in a company to a non-member, unless the non-member has offered to buy all the existing members’ interests on the same terms.

In conclusion, the new CAMA appears to have abolished the ‘mandatory restriction’ on the transfer of shares of a private company. Hence, restriction on transfer of shares is now optional for a private company. A private company must however incorporate the conditions/restrictions in Section 22(2) of the new CAMA in its articles if it chooses to restrict transfer of its shares.


Wednesday, 12 August 2020

WITHDRAWING CONSENT DURING THE ACT; KNOWN OR UNKNOWN TO LAW

The World is said to be a global village; with the help of technology the world has become a small village. Technology has placed a lot of information and happening around the world at the tip of our finger; all we need is an enabled phone, good network and sufficient data. In as much as this technology has helped it has also brought about some concept which is gaining ground; one of it is the concept of withdrawing consent that was at first given during sex and calling it Rape. This write up will define Rape, discuss the issue of consent and give its opinion on the concept

Rape is a grievous crime and has been defined under Section 357 of the Criminal Code (Applicable to southern Nigeria) as an Unlawful carnal knowledge of a woman or girl, without her consent, or with her consent, if the consent is obtained by force or by means of threats or intimidation of any kind, or by fear of harm, or by means of false and fraudulent representation as to the nature of the act, or, in the case of a married woman, by impersonating her husband, is guilty of an offence which is called rape.

The Penal Code (Applicable to Northern Nigeria) under Section 282 says a man is said to commit rape who has sexual intercourse with a woman in any of the following circumstances:

(a) Against her will;

(b) Without her consent;

(c) With her consent, when her consent was obtained by putting her in fear of death or of hurt;

(d) With her consent, when the man knows that he is not her husband and that her consent is given because she believes that he is another man to whom she is or believes herself to be lawfully married;

(e) With or without her consent, when she is under fourteen years of age or of unsound mind.

The Violence against Person Prohibition Act 2015 which is the latest legal document on Rape defined rape under Section 1 as:

(a) Intentionally penetrating the Vagina, Anus or Mouth of another person with any other part of his or her body or anything else;

(b) The other person does not consent to the penetration

(c) The consent is obtained by force or means of threat or intimidation of any kind or by fear of harm or by means of false and fraudulent representation as to the nature of the act or the use of any substance or additive capable of taking away the will of such person or in the case of a married person by impersonating his or her spouse

An infinite perusal of the various definition of Rape shows that before now Rape could only be done by a Man on a Woman; the Violence against Person Prohibition Act 2015 as however defined rape in a gender balanced nature.

Also the concept of Consent in the various laws connotes that is given or withheld before the Act, none of the Law envisage the concept of giving consent and then withdrawing the same consent during the Act. As such, in as much as Consent was duly gotten none of the consenting party can later come up to claim rape. Consent negates Rape.

The Constitution provides that no person shall be held to be guilty of a criminal offence on account of any act or omission that did not at the time it took place constitute such an offence Section 36(8). Flowing from this provision of the constitution which is the Grundnorm of the Country, withdrawing consent in the middle of the act does not constitute rape if the other party continues and does not stop. The Nigeria Global world might have tagged withdrawing of consent to mean rape if the other party does not stop but then this does not relate to rape under the Nigeria criminal system.

A glean into the plenthora of case laws in Nigeria and other Jurisdiction gives us more insight as to whether consent when withdrawn during intercourse can amount to rape. In the case of Charlse Ekpo and Another v. The State (1976) LPELR- 1095(SC) It was stated that In a case of a rape, the person ravished is a competent witness and her evidence is always vital in deciding the most important element in the case, namely, whether sexual intercourse was by force and without her consent. However the statutory definition of rape places emphasis on unlawful carnal knowledge i.e. Penetration by force, deceit, impersonation or threat. And the word of the statute is of the effect that these four elements must be present prior to the act thereby evoking the provision of section 36(8) of the Constitution of the Federal Republic of Nigeria as amended. The wordings of the statutes defining the offence did not leave a clear escape route by adding an omnibus clause neither did it contemplate the withdrawal of consent during the act. The law is that rape is completed upon Penetration. Penetration means inserting anything or any part of the body into a person's genital orifice. The law in this case do not contemplate the duration of the penetration as the law considers the slightest penetration of the orifice as rape. By this, it is clear that in the eyes of the law there is no difference between a person for instance who inserts his penis into the Vagina slightly or merely touches it with the tips of his penis,body or thing and a person who continues in the to and fro movements during sexual intercourse until ejaculation or orgasm. Therefore there can not be issues of withdrawal of consent since rape is not constituted by the duration of sex but by slightest penetration. See Habibu Musa v. The State (2013) LPELR-19932(SC) By this we can safely say that the act of sexual intercourse is completed upon Penetration and such intercourse amounts to unlawful carnal knowledge only when it is done without consent or with consent where such consent is obtained fraudulently.

However the issue of withdrawal of consent is more likely to thrive in actions for trespass to person, battery or assault. Trespass is the slightest interference with a person or thing unlawfully or without consent. It includes unlawfully being in a premises. In Zenith Bank Nigeria plc v. Ekereuwem and ors (2011) LPELR 5121 (CA) it was stated that Trespass "By its definition in the Black's Law Dictionary, 8th Edition page 1541, trespass means an unlawful act committed against the person or property of another especially wrongful entry on another's real property.   Unlike rape, consent to touch a person, thing or to be in a place can be withdrawn and at such point when it is withdrawn the continuation of such act constitute trespass because in this case the law is interested in the slightest interference when done without consent and the duration if done after consent is withdrawn.  Therefore a person who withdraws consent during sexual intercourse initiated by consent can bring an action for trespass to person and not rape. Such person can also bring an action for battery after such consent is withdrawn

In Registered Trustees of Masters vessel Ministries Nigeria Incorporated v. Rev. Francis Emenike and ors. (2017)LPELR-42836 (CA) the court stated  The law is also clear that trespass is actionable per se and once proved, a plaintiff is entitled to damages even without the proof of actual injury resulting from the wrongful acts constituting the trespass. A party who proves trespass is entitled without more to general damages which is quantified by relying on what would be the opinion and judgment of reasonable person in the circumstances of the case. See NBC v. Ubani (2009) 3 NWLR Pt. 1129 Pg. 512." Per OGUNWUMIJU, J.C.A. (P. 29, Paras. C-E)

Judicial activism however can turn the tide around. The court may if it please interpret the statutory provision to include withdrawal of consent. The Supreme Court has stated severally that the court must be proactive in adapting the law to contemporary issues vide interpretation and until the court does this the law remains that withdrawal of consent does not constitute rape.

Therefore a persons who withdraws consent during intercourse may be able to bring an action for battery or hope for judicial activism in this regard. It is pertinent to note that the court may be unwilling to toll this line of thought neither will it be easy to prove trespass to person or battery especially where consent was initially granted.

Thus to fully entrench the concept of withdrawal of consent during intercourse into our legal jurisprudence the appropriate legislation will have to be amended by the stakeholders.